Dollar Slips, Sterling Pulls Back From 11-Month Lows

The dollar slipped lower  giving back some of the previous sessions gains, while the pound regained ground after falling to eleven-month lows amid worries over the growing prospect of a no-deal Brexit,on Tuesday.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.17% to 95.03 by 03:29 AM ET (07:29 AM GMT), after edging up close to a one-year high of Monday.

Demand for the dollar continued to be underpinned by expectations for a faster pace of interest rates hikes from the Federal Reserve this year.

GBP/USD was up 0.15% to 1.2962 after falling as low as 1.2919 on Monday, pressured lower by fears that Britain is on course to exit the European Union with no deal.

The euro was also higher, with EUR/USD rising 0.2% to 1.1577 after hitting a five-week low of 1.1529 in the previous session following data showing that German factory orders slumped in June, posting the biggest fall in almost 18 months.

The dollar was a touch lower against the yen, with USD/JPY dipping 0.07% to 111.33 ahead of expected bilateral trade talks between the U.S. and Japan in Washington on Thursday.

The Australian dollar was higher, with AUD/USD climbing 0.45% to 0.7420. Overnight, the Reserve Bank of Australia kept interest rates steady at a record low of 1.5% and indicated that rates will likely remain on hold for some time.

China’s yuan moved higher against the dollar, with the currency, which is usually closely controlled by Beijing, at 6.8554 in offshore trading.

Elsewhere, the Turkish lira firmed up against the U.S. currency after falling to record lows on Monday, buoyed by hopes that tensions between the U.S. and Ankara may ease. USD/TRY was last trading at 5.2557./

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